Good morning, everyone, and thank you for joining us today for our half year results for 2025. I'm joined by our CFO, Oskar Zahn, who will take you through our financial results in a minute, but a few words from me before I hand over. I'm very pleased with our performance for the first half with double digit net revenue growth and strong cash generation, despite the European economy remaining flat. This continued market outperformance is testament to our robust business model and the critical role we play in the success of our customers. Our key KPIs have also progressed well.
Number of active trucks with one or more products growing 5% year on year to over 313,000. An average number of products per truck grew slightly to 2.8 products. This nicely demonstrate that we have a significant opportunity ahead of us to cross sell as we continue with the gradual deployment of Herovac Office and its integrated workflows, motivating customers to consume more of our products. Engage is about how our customers interact with our products, how we are developing our products to ensure we keep adding value to our customers, how NPS improved slightly year on year to 43 points, industry benchmark, so logistics, financial services, software is on average 39 points. Retail is about moving towards a full subscription model and is aligned with the delivery of the platform.
Today, our data centric mobility products make up over 24% of our revenues and that proportion is expected to grow. The year on year decline is not due to an absolute decline of revenues, but because the strong performance in our payment solution revenue in the first half, which led to a higher contribution to total revenues. I will talk more about Eurovac Office or platform later in the presentation, but I must say it supports or even enhances each of these strategic pillars. It will support the new digital sales channels. It will drive customer loyalty and improve retention rates, accelerate cross sell and will start to push subscription revenue up.
As well as delivering these results, we have been focused on integration and transformation of our people, technology and data systems. We have made good progress and as a result, we have been able to improve our adjusted cash EBITDA by 14%, which is a core financial KPI for us going forward. Eurovac has always generated strong cash flow. And as a result, we have been able to deleverage to 2.x net debt to adjusted EBITDA from 2.6x this time last year. Our outperformance in cash generation in 2024 meant that we were able to pay a special dividend of GBP 3 per share to shareholders in July following the approval at AGM in May.
And finally, this continued momentum into the second half of the year and our confidence in this year deliverables, we rated our guidance we communicated at the full year in March. Following the approval of the new incentive plan at yesterday's EGM, we have revised our EBITDA margin guidance to around 40% at the year end, with these awards having non cash impact on EBITDA in the second half. Excluding these non cash adjustments, margin would remain at the same levels as the last year as we communicated at the start of the year. Oscar will talk more about guidance later. I want to reiterate our focus on cash generation going forward and the importance of returning value back to shareholders.
Now I would like to hand over to Oskar, who will walk you through our financial performance.
Thank you, Martin, and good morning to everyone on the call this morning. As Martin has already mentioned, we are pleased to share a strong set of results with you for the first six months of the despite the sustained macroeconomic challenges. Before I move into the details of our financials, let me take you through some key highlights. Our net revenues increased by 15% to CHF 162,200,000.0, mainly driven by double digit growth in our payment solutions and continued growth in our mobility solutions. As previously indicated in our 2024 full year results, we introduced adjusted cash EBITDA as a key metric to EuroWag.
Adjusted cash EBITDA increased 14.1% year on year to €49,200,000 with a margin of 30.4%. Adjusted profit before tax increased 28.4% to €27,800,000, which resulted in a 16.3% increase in adjusted basic EPS to 2.9¢ per share. Looking at our investment in the business, we spent €17,900,000 in capitalized R and D. This is about the development and integration of our products and technology, which will support the new EuroWag office platform. In addition to this, we spent just over EUR5 million on onboard units, which are key to our growth in revenues.
Our net debt position has improved again from year end, reflecting our continued strong cash generation with our net leverage now at two point zero times net debt to adjusted EBITDA, which is now well within the board's target range of 1.5 to 2.5x. Moving to Slide eight, which is the growth since 2021. Since our IPO in 2021, not only has the business fundamentally changed, but Eurowac has consistently delivered strong financial performances, underpinned by our strategic shift towards integrated solutions. On the left, you can see our net revenue growth, where we have included our subscriptions revenues. While payment solutions remain a solid foundation, our subscription revenues now contribute around 24% of total net revenues versus 10% at IPO.
As we start to reassess our revenues and move towards more of a recurring revenue metric, energy and toll revenue will naturally form part of this as they are predictable and highly recurring in nature. On the right, our adjusted cash EBITDA has more than doubled since IPO. This momentum continued into the first half of the year with growth of 14.1%. As a reminder, we define adjusted cash EBITDA as adjusted EBITDA but less capitalized R and D and adding back noncash share based payments. We believe cash EBITDA is a more appropriate metric for the underlying performance of the business and therefore intend to transition our key metric from adjusted EBITDA margins to adjusted cash EBITDA and margin.
The transition is also reflected in the new incentive plan, which shareholders approved yesterday, that has adjusted cash EBITDA as the key performance metric. Moving to Slide nine, which is the net revenue bridge. As already mentioned, our net revenue grew 15% to 162,200,000. Our payment solutions grew 22.7% year on year to 97,900,000.0, supported by an 11.4% growth in energy, driven by higher volumes and strong growth in toll revenues of 50.3% as a result of our planned East geographical expansion and CO2 charges in Germany and Austria. Mobility Solutions grew 4.9% year on year to 64,300,000.0, driven by growth across our tax refund and scaling up our transport management solutions.
This was partially offset by a slowdown in non CRT fleet management solutions and flat navigation growth. Excluding nontruck revenue such as LGVs, buses and passenger cars, mobility revenue grew 7.8%. We anticipate these non truck revenues, which we acquired with SiGeck in our FMS businesses, to decline over time as we focus on the CRT industry and heavy vehicles and fleets in line with our strategy. Moving to Slide 10, which is the adjusted cash EBITDA bridge. Adjusted cash EBITDA grew 14.1% year on year.
Excluding the commercial settlement net settlement of $2,200,000 in H1 twenty twenty four, adjusted cash EBITDA grew 20%. Customer insolvencies were higher than expected in the first half of the year, particularly in markets such as Poland, Romania and Austria. However, we saw our credit losses decreasing by 7.9% versus last year. Our credit loss ratio remained stable from the December at 0.4% of gross revenues and toll volumes. The $8,000,000 increase in employee expenses was driven by an investment in people to support the business, new CCOs, COO and other senior management, as well as a 5.4% increase in salaries.
Excluding the non cash expense related to senior incentive programs, employee expenses grew 18.6%. Technology and other OpEx grew 4,700,000.0, of which 1,100,000.0 relates to our investment in technology and cloud transformation and 3,600,000.0 on other expenses relating to marketing, travel, professional fees, etcetera. Capitalized R and D grew about 5% as we continue to invest in the development and integration of our products and technology, including Eurowag offers. This moves well into Slide 11, which is the CapEx chart. Capital expenditure increased by 4,100,000.0 or 20.1% to EUR 24,700,000.0.
In line with our capital allocation model, capitalized R and D will be invested in products, the Eurowag office, technology and data platforms. Capitalized R and D per spend increased by 900,000.0 or 4.9% to EUR 17,900,000.0, of which GBP 12,800,000.0 was spent on products and the Eurowag Office and GBP 5,100,000.0 on development of our technology and data systems, which are the foundation of our integrated platform. Martin will talk a little later about the progress made on Eurowag Office and the integration of our solutions. Around GBP 5,000,000 of CapEx is spent on hardware, which are our onboard units, which I already mentioned is driving our revenue growth. Investment in infrastructure of $1,400,000 mainly relates to our legacy truck parks, Buildings and IT hardware.
Our CapEx target for the year remains unchanged, with R and D remaining well below the capital level of $50,000,000 in FY 2025. Moving to Slide 12, which is the net debt bridge. As we continue to focus on reducing our net debt, I'm pleased to report a further improvement in net leverage to two point zero times, a reduction from December of 0.3 times and 0.6 times in the last twelve months. This has been driven by 60,000,000 of free cash and a neutral working capital change despite increased revenues, reflecting the initiatives we've been implementing across the business. These initiatives include looking at both our customer and supply payment terms across the fuel and toll portfolios as well as improved ways to finance our working capital through factoring facilities and reverse factoring.
We've provided in the appendix of this presentation an overview of our working capital movement as well as the gross revenue and toll volumes, which gives you a better view of our payables and receivables. Moving on to slide 13, which is the capital allocation. We introduced our capital allocation priorities six months ago as part of our 2024 full year results, and since then, we've remained focused on cash generation and the development of our platform. EuroWare continues to reinvest capital into the business to drive top line growth. This reflects our strategy to unlock further value through digital cross selling and improved operational efficiency, driving standardization and optimization across the whole organization.
We've demonstrated consistent deleveraging and are now at 2.0x, well within our target net leverage range of 1.5x to 2.5x. Looking ahead, our approach to M and A is focused on two areas: looking at bolt on opportunities that add new products to the platform, factoring could be an example, or those businesses with connected trucks and similar services that can be migrated onto our platform to enable cross sell opportunities. As reiterated by the implementation of our new long term incentive plan approved by shareholders at yesterday's EGM, growth in adjusted cash EBITDA remains our core priority. Should the business deploy cash effectively across the three strategic areas mentioned above and still have excess capital, the Board will consider returning a portion to shareholders. Finally, on Slide 14, which is our guidance.
With our performance today, we are confident in delivering our 2025 guidance. We continue to deliver strong results despite the continued headwinds we see impacting the European CRT industry. This gives us confidence in delivering low teen revenue growth in the near term as previously guided. Adjusted EBITDA margins to be in line with FY 2024 before any noncash adjustments relating to the new long term incentive plan. As a result of the new plan, there will be a noncash charge to EBITDA in the second half of the year.
And as a result, adjusted EBITDA margins will be around 40% for FY 2025. As previously mentioned, we expect capitalized R and D to remain below the cap level of 50,000,000 adjusted cash EBITDA and continue to expect this to be in the range of 90,000,000 to $100,000,000 for the year. And we expect our net leverage to remain around two point zero times after the special dividend payment of $24,300,000 in July. With that, I'd like to hand over to Maarten for a more in-depth view of our strategic highlights.
Thank you, Oscar. You have all seen this slide before. We showed it at a full year results and I want to keep reiterating it because they are key metrics that we as a business focus on. Number of trucks and number of products. There's currently over 313,000 trucks connected to one or more of our solutions today.
We set ambition to reach 1,000,000 trucks in Europe. On average, our customers have 2.8 products per truck. This is the accessibility of more than eight products. You can see that great opportunity that lies ahead of us. You then add the end to end digital platform, Eurovac Office, which we started to roll out last year, which will start to accelerate both number of trucks on the vertical axis and the number of products per truck on the horizontal axis.
Our focus on customer acquisition today has been about door to door sales and integrating our sales teams post acquisitions. To ensure we maintain sales momentum across all products as well as to drive cross sell. Going forward with digital platform, our focus is about seamless omni channel approach with strong digital and indirect channel. The indirect channel is being established with our three OEM means truck manufacturers partners with strong brands across Europe and will open many doors for us, not just in our current markets, but also in the markets in Europe where we were underpenetrated such as Western Europe and Nordics. Focusing on these additional sales channels, we significantly reduced our acquisition costs.
Increasing the number of products will ordinarily increase the average revenue per truck, but it also has a material impact on customer retention rates. Once a customer is taking four or more products, we tend to have that customer for lifetime. Today, we have not spoken much about our operations and how we are driving operational effectiveness across the organization, which we have been doing in the background for further to further strengthen our foundations for the future. Following our acquisitions and having appointed as CEO last year, we are now moving at pace to streamline our operating model across people, processes, systems and customer experience. We are driving standardization optimization across the whole organization, which will bring efficiencies and more importantly, create value over the medium term.
Having made good progress already in the first half, we have already seen some benefits across our OpEx, CapEx and working capital base. Some of these areas we have focused on include improving our customer experience through centralization of our tech and support teams as well as the standardization of the processes systems, allowing for future implementation of AI and chatbots. We have also enabled twenty four seven customer support across most of our markets. We just significantly improved our customer experience. As we cross sell our solutions to customers, it's important that our customer care teams can help them with all their needs, not just one single product.
These improvements across our back office are not only necessary for short term value creation, but will enable us to scale at pace once EuroBack Office fully integrates all of our solutions. Some other examples includes changes to our procurement process to centralize them across the group, as well as standardization of hardware, particularly the onboard unit for all our data solutions such as fleet management solution, work time management and toll with all the relevant components already pre installed within the unit to enable easier digital cross selling once the onboard unit is fitted in the truck. A few more examples include rebranding our acquired businesses to Eurovac and lastly, migrating all employees into one HR and expense systems through the streamlining processes across the organization. We presented this slide at the Capital Markets Day and it really encapsulates what we have been trying to build over the last few years. We often get asked where our capital investment is going and I would point you to this technology stack.
We launched Euroback Office last October, and we continue to bring it to life by adding step by step all group solutions. One of its front ends, Euroback Office navigation app already provides drivers with transport details, routing, notes from dispatcher, live location tracking, as well as Euroback Pay, which allows the truck driver to unlock the fuel pump. This is a nice example of powerful and market unique integration of multiple products. In this case, navigation, telematics and DMS data into one. Integrated business services.
This is not only about talking all our solutions and migrating them into your back office, but it is about integrating these solutions to create businesses end to end workflows that brings material change to our customers in terms of safe cost, time, and better decision making. One of my slides later bring this to life to truly show you the possibilities of bringing this all together. Every modern platform is supported by modern technology and data architecture. We have been building a tech and data platform which is about number of components seamlessly supporting each other. We have migrated a large portion of our customers' data onto one data platform, which enables building AI and algorithmic tools for customers, which will truly change the way they run their business.
So as you can see, we have been very busy building not only on the application which is visible from the front end, but we have had to build the foundations, the back office, in which we are able to scale and grow over the long term. As we bring the first integrated digital platform to the CRT industry, it's important for us to understand our customers. We do this through continuous market research. And every year, we publish a customer insights report, which allow us to access the real pools of the market and understand what our customers truly want. Earlier this year, we did a customer survey which only reiterated our customer pain points and priorities within their own business.
The most important services to our customers remains as follow. Real time cost estimation for loads and fuel management are key for managing the truck unit economics, which is together with cash flow one of the biggest issues in the industry. Driver work time management is a key to keeping up with regulatory changes and avoiding heavy fines. And digital transport orders that can be integrated into planning and delivery of the loads until the final invoice is created, helping to make their operations process seamless and more efficient. In response to this customer feedback and our continuous monitoring over the last few years, our ambition was to create the industry first integrated platform, which will enable our customers to bring all their processes and data into one platform, drive efficiencies through their operations and over the time allow them to access to finance which they might not be able to get elsewhere.
We developed a roadmap for this platform and the creation of Eurovac Office, where we have prioritized the migration of certain solutions earlier versus those we will integrate and migrate over the time, which leads me nicely to the next slide. Before I talk about the progress made on Eurovac Office this year, I wanted to briefly remind you of our long term roadmap. Last year was about the migration and improvement of our navigation, which is a backbone of the platform. Real time navigation and routing will enable better and more accurate decision making whilst planning a load or whilst the truck is in transit. We have also migrated our FMS product along with some customers.
2025 is about migration of our large revenue generators, energy and toll products and the launch of our indirect channel. Next year, will integrate the back office services such as tax refund, vortex management and enhance the AI tools available to customers. And we will have the ability to accelerate cross sell through the platform. As a reminder, the phased rollout has different stages. First, you need to migrate products.
Once the products have been migrated to the platform, we can start to migrate existing customers and also bring new customers onto the platform via our new digital onboarding process. Our ambition is to have around 30% of our customers using Platform by early next year. This year so far, we have integrated our energy payment solution within the Euroback Office application, alongside with the introduction of our e Wallet solution, which allows customer to view their energy transaction and credit limit in a way they are used to from banking world. The next step is in further developing of the platform is introduction of the digital onboarding for new customers. This will streamline and accelerate customers onboarding including instant issuance of digital card as well as physical few card within days rather than weeks.
These tools will enable scaling of both the direct and indirect channels, which has historically been reliant on salespeople and manual processes. As the part of digital onboarding launch, we have piloted fuel card sales within an OEM dealership in Spain and Italy. The ambition is that once the sales process have been tested, we can further expand our indirect reach to dealership across Europe. We have also started to pilot the toll solution through the Eurovac Office application and will start to migrate both energy and toll solution customers to the platform by the end of the year. In order to bring to life what can be enabled once we migrate and integrate our solutions into one platform and how we can digitize the product and processes.
I will move to the next slide. I mentioned earlier the technology stack we were building is not only about bringing a number of mission critical solutions into one platform, but it's about connecting all the data and services together, which results in something unique for customers. Transport operations are amongst some of the most complex businesses today. Every shipment involves involves countless moving parts, orders, routes, drivers, documents, customers, often fragmented across disconnected tools and manual processes. Our platform, Euroback Office, aims to totally digitize this manual reality by integrating everything into one seamless flow.
It brings with customers requests. Instead of manual entry, AI instantly extracts from a paper document or email key details, addresses, cargo dates, building the optimal routes in the seconds. Fuel prices and margin selection are factored in, so dispatchers can deliver accurate and competitive quotes leveraging AI. Once confirmed, planning is fast and visual. Dispatchers manage jobs in real time with full visibility.
Drivers receive up to date instructions directly on their devices, no calls. Throughout the journey, the system monitors progress, delays, and cosmetics giving executives real time control over operational performance. The result is a step change in performance, fewer errors, faster cash flow, stronger margins, and significantly more efficient more efficient operations. I hope you are starting to see what was only an ambition a few years ago is becoming reality. The impact will not only be on our customers, but will gradually change the entire industry.
So to conclude, another strong half year with much progress made across the organization. We made progress on the Eurovac office roadmap and are clear with what needs to be delivered in the next eighteen months. We are starting to see results from the integration of our acquired businesses. And with our performance in Cage Generation, we have been able to deleverage back well within our guidance range to 2x. Looking to second half of the year.
As you can see from the results today, growth in Energy and Toll is strong and therefore we want to maintain this growth whilst transitioning to the platform. Keeping this in mind, in the second half of the year, we are migrating and adding the ability to onboard new Energy customers to the platform. We have started to pilot the toll heat solution within Eurovac office and it will gradually start to migrate customers towards the end of the year. We have also started to migrate Webari customers onto the platform. Each product represents thousands of customers and therefore we anticipate we will have around 30% of our customers using the platform by early next year.
We will be further developing our indirect channels, particularly around digital onboarding to dealerships across Europe. Harvesting further cost synergies relies from integration and acquisitions and streamlining our operations. As a result, it will further strengthen our cash generation. With this, I would like to open the session to Q and A. Thank you.
Ladies and gentlemen, we will now begin the question and answer session. Participants can submit questions in a written format via the webcast page by clicking the Ask a Question button. If you are dialed into the call and wish to ask a question, please use the raise hand function at the bottom of your Zoom screen. If you are dialing by phone, bottom
The first question is from Alex Short at Berenberg. Please unmute yourself and begin with your question.
Martin, Oscar. Alex Short from Berenberg here. Three from me, if you don't mind. Firstly, could you please outline how the cash flow and liquidity measures outlined at the FY 'twenty four results are progressing? It seems you're essentially working capital neutral in H1 when there has historically been quite low swings.
What can we expect similar going forward? Secondly, you noted the higher than anticipated credit losses in H1 of the result, the more challenging macro. Have you seen any change or improvement in your end markets from a macro perspective towards the end of H one or so far in H two? Or is it sort of similar to to what was your end of one? And then finally, on the competitive environment, obviously, highly fragmented and very complex given the the breadth of your product suite.
Have you seen any change in the competitive environment across the year? Has there been any thinning out Or are there any other shifting dynamics from a competitive perspective that you'd like to highlight?
Yes. Oscar will take definitely the first part of the question. I will take that.
Okay. The cash flow, look, it was a great first half for us in terms of the cash burn. It's a number of periods now we have demonstrated strong cash generation. So is it repeatable? We had a big swing, as you know, back eighteen months ago, a year ago, and we improved that significantly at the year end.
I suggest that the what we're trying to do, if you recall, is maintain the balance between payables and receivables even with the revenue growing, and that's that is my current objective throughout. And and it's it's sometimes more challenging. Just to highlight, you know, some some areas is are more difficult to manage than others. For example, toll receivables, the terms and conditions are essentially set by the governments and and very difficult to negotiate. So trying to get the same terms pushed down to our customers can be a challenge.
So I would suggest that it's not repeatable, but trying to keep a the big swings can happen. We we know working capital can swing 50,000,000 in one day for us because we we've got a gross revenue level of about 4,000,000,000 in a year. So that is what we're dealing with and what we're funding. So it's easy can easily swing, but our our goal is always to try and balance the two off. Yeah.
Well, if you can just expand, you know, on the credits. I would just do intro, Alex, in terms of like economy and markets. Of course, we are observing number of indicators, new truck sales, kilometers toll consumed in large countries like Germany, spot rates versus long contracted rates, etcetera. And everything rather such as the and not surprisingly that the the the industry is flat as the European economy is like a zero plus. Some analysts are suggesting that there will be 1% growth in terms of overall performance of the of the industry, I mean, in terms of kilometers.
But I would rather call it really zero plus environments, which I believe is reasonable to expect to continue. Of course, we scabbat of a very unstable macro geopolitics and the things which are happening everywhere and which we are all aware. How it translates to our expectations, Oscar,
if you can Yeah. It it's it's a it's a difficult one to always forecast for us. So we what we we we, of course, follow the insolvencies, which were higher than we had expected, and there's normally a slight lag on on on how they they transfer into actual losses on the p and l. We saw a peak in insolvencies in our region in quarter four and quarter one this year and the assumption of we saw a slight turn down in quarter one, but then a tick up in quarter two. And that was that's what sort of made us a little uneasy.
Looking where we are today, it it seems to be have stable at a at a high level. That's the issue we have. The the overall insolvencies have have stabilized, but they're still much higher than they have been historically. How that translates into credit losses in our p and l, we we have seen a cleanup, if you wanna call it that, of of of poorer credit credit customers, but the overall macros is challenging. There's a number of indicators.
Maran's mentioned a few, but also spot and and contracts are are key lead indicators for us as well in terms of how how our customers are behaving. Fuel prices, all of those things have an impact. Interest rates are still high in the region. Inflation remains high in some of the regions we operate. So it's difficult to predict, but we think the the current rate, what we're doing internally is assuming it will it will come at maintain at the the similar level for the rest of the half.
And, Alex, regarding the question, Greg, in terms of competitive landscape, no. Since we last talk, the things didn't change that much. What we see is definitely continued trends in solutions which are providing more integrated experience, which is simplifying life of these predominantly SMEs. So definitely confirming our our trajectory and our strategy. How we see the this manifesting in the market, it's not only that competition is trying, you know, at least to to embark on this journey and to do something in this era.
But we see as well number of deals, a number of companies coming into the market which are providing just single product and they see that their future is not anymore bright while being just provider of one one specific service, which is difficult to sustain and is subject to commoditization. So this trend continues. And the second area which I would like to mention is the carbonization because there is a lot of buzz around that with some changes in in in US. And what we see definitely is that as well because of European Union delaying certain measures, certain reporting obligation, etcetera. We see partial relaxation in terms of some customers which were, let's say, more agile in implementing in implementing, let's say, new ways of working in in procuring new trucks, low emission trucks.
But there is a as well, quite considerable part of the market, which is continuing in these efforts. So how it translates to Euroback that we continue in our efforts, you know, that we are very strong. We are leading the Peloton in terms of size of the LNG network, size of the synthetic fuels network. We were we are the first CRT, solely focused e mobility service provider. So we are running full swing because what is without debates that the carbonization will happen only it's a question both the technologies, and I'm super happy for this now more open dialogue in terms of technological neutrality.
And we know that there are already viable ways. We know what are the obstacles, and that's the that's the role which Yorubaq as leader, he simply has simply taken. But it's not only forward looking initiatives or activities. We see already now that it translates that especially larger fleets are much more active to Eurovark proposition exactly because we are energy agnostic, and we can offer very robust solutions in all the low low emission powertrain domains. So so that's that's definitely good, our commercial teams are very much utilizing that.
Right. Thank you so much, guys.
Just a reminder, participants can submit questions in written format via the webcast page by clicking the ask a question button. If you have dialed into the call and wish to ask a question, please use the raise hand function at the bottom of your Zoom screen. The next question is from Gautam Pillai at Peel Hunt. Please unmute yourself and begin with your question.
Great. Good morning, Martin and Oscar. Thanks for taking my questions and congratulations on a strong set of first half results. Now you have grown well in the last few years despite the macro situation in Europe. Can you walk us through the growth levers going forward?
You did mention, Martin, in your prepared remarks, there are two drivers of revenues, the number of trucks and the number of products per truck. Now should this accelerate as you hit the milestones in the platform development? Some color around that would be great. Secondly, can you give us an update on the OEM partnerships with the large European truck manufacturers? How are you progressing on that?
When do you see some of the go lives happening and so on? And finally, a question on the cash generation and it's been has been very strong in the last three interims. Obviously, what you did touch upon working capital management, Oscar. Obviously, the other factor is the CapEx or the R and D capitalization spend. And this has been tracking below the $50,000,000 guidance you provided for the full year in the first half.
How should we think about the CapEx ramp up in the second half? Thank you so much.
Thank you, Gautam, for questions. Yes. When it comes to platform, Gautam, as you pointed, there are two major levers on value creation in Eurovag. This is number of trucks. You can translate it in in in a world of software to, like, end users.
And secondly, number of products. And you've seen the progress in both while still working in, let's say, transition period where we are still selling our verticals in separation with different tools, with different front ends, with different passports, these limited these limited bundles. But still, you see quite good progress, and I would highlight this shift 0.2 to 2.8 products per per truck. It's quite significant number. And I would like to highlight here that we need to consider that we are still having inflow quite large inflow of new customers, which are, of course, diluting the number backwards.
You know? So what we are planning to work more and more with cohorts in order to demonstrate how the older cohorts are are accelerating because, of course, the number number of growth of these cohorts is is much bigger. How it will change with the platform? Dramatically, Because this is ex at the essence of the of the of the case that nowadays customers are wrestling with number of systems. Still, we speak about SMEs or family businesses, and they are desperate to get solutions which will simplify their work with which will allow them to to focus on where they have a value added, take care about drivers, gets gets get good deals on the market, and not to wrestle with administration, with data, with analytics, and and decision making which could be replaced by algorithms and AI.
So this is what platform how platform is built. That's why it's as well complex exercise for our product and technology teams because we are as we are migrating products, we are doing it in a way in immediately to deliver to deliver the the the cases use cases, which are exactly utilizing number of systems which previously were in isolation. And very good example is cost calculator. Believe or not, in the industry, it's this is one of the biggest challenges that when the tracker is bidding for the new job, they do not know what will be the profitability because they do not know what will be the cost for for this. And that's what we already implemented in our in our platform, which is merging multiple systems together and multiple data.
And it gives finally the accuracy to to trackers in in one click in terms of what will be the profitability, what they can bidding for, what can what they can be bidding for. You know? So so this is huge change for for our customers. And, therefore, as the cost calculator is drawing from multiple system, fleet management, navigation, fuel, etcetera, naturally, customer is motivated to take more of these products in an order to be able to benefit from cost calculator, which was just dreamed so far. So definitely, the cross sell will be this is one one big and very obvious bet which we are making.
And when it comes to number of trucks, here, there there are other levers, and this is a digital and indirect channel, which brings me to your second question, Gautam. In fact, they are somehow interconnected. They are strongly interconnected because to enable indirect channel, the experience for customer, experience for dealer who is promoting this has to be really absolutely seamless, a paperless experience. Yeah? So as we are progressing this digitization and the digital channel, the indirect channel is benefiting out of it.
And both of these channels are being introduced on a platform. We are as well commenting in these results that we are introducing so called online digital onboarding, which is then followed by self-service, which enables customers to activate via services on their own. And here we speak especially about the small segments, which is costly to serve one to 10 because in bigger segments, especially twenty thirty plus, we do expect still still interventions over human a either over the phone or or or by by regional regional sales managers. So these are the two big levers which will be adding to current door to door sales, digital and indirect. And very concretely, in recent period, we were we were piloting Spain and Italy.
We we selected dealers. We were testing the applications, workflows, and and this is, of course, very enhancing because this give us, like, a good understanding what needs to be improved, what needs to be changed, but then and allow us then consequently to to scale it in more dealership and ultimately across Europe. So good progress on both fronts, Gautam.
And also, the question on CapEx, also a good question, Gautam. What we guided to was a cap of 50,000,000 and not an absolute spend. And we are so I mean, under $18,000,000 for the first half. We expect a ramp up in the second half, but we will not spend the full $50,000,000 cap. So I would assume quite a bit less than that, but it's certainly going to ramp up as our road map progresses into the back end of the year and into quarter one and '2 next year.
The next question is from Bram Burring at Wood.
Yes. You mentioned the acquisition of new trucks diluting the product per truck metric. So is it fair to assume that at this point, when you're adding new trucks, that they are signing on for one, max two new products in terms of thinking how that's product per truck metric is going. And conversely, what does it look like in terms of products per trucks when we're thinking about just the established clients you have? That's the first question. The second is a little bit more on the OEM relationships.
With which dealer networks have you already had your people in there and and trained them trained the dealer network salespeople, trained them to encourage new clients to activate VeriWag services on the trucks where it's installed? Thank you.
Thank Thank you very much for the questions. Yes. And I think a great, great, great observation. Indeed, the proxy so far was that whenever we are acquiring custom, typically, he's starting with one or maximally two products. You we we need to understand that what Eurovac is delivering is really at core or at the heart of the operations.
So it's natural that they are kind of testing things before they are jumping on, let's say, broader broader product suite. What is the first product traditionally in Eurovag before all the acquisitions? It was, of course, fuel, which is the most commoditized, the least switching cost, the smallest switching cost. More recently, as we were have very strong arm of of software products. These are as well the acquisition acquisition tools that customer is is starting with the fleet management and then converging eventually to payments.
So we have now more entry points than we had before. However, with the platform and this is something what we are learning because nobody was doing that before, bundling mobility payment solutions, you know, tax refunds, factoring in all these services which we either have or or will have in in the near future. So we we will be testing on a market, and this is happening again as we speak. You know, what could be the bundles? Can we crack this and Sure.
Customers to jump on bigger products within just one or two products. Yeah. So so this is, of course, still open question, which we do not have answer yet. But stay assured that this this bill bill will be higher on our agenda. Where my guess is that it will rather stay one or two products, but what for sure will happen, that platform will accelerate the time of in between adoption of the next product.
Because simply, the the benefits will be so obvious, so well communicated, and so easy to add a new product compared to situation before that we expect rather the curve to be accelerating more than that customer will take immediately four or five products. Yeah. One day, it might happen, but I believe that in next one or two years when the industry is learning these new new new new ways of working, I believe that this will this will still stay stay in in this shape. When it comes to OEMs, where we were testing is either core and Volvo. However, either core this either core, we are the most advanced in terms of testing these new digital tools, especially Spain and Italy, which is either cost strongholds.
So there, we are the most advanced. So so whenever we develop something, we are testing it to this this this brand. But as said, we were testing in this both. However, we do expect these all three track manufacturers, you know, to go through the same process, although naturally, somebody will be more advanced, somebody will be will be will be will be following from for various reasons.
And Bob, and having full coverage of those dealer networks, this is a you having full coverage of these dealer networks. Is this a story that can be that would be completed in 2026? Or is this more like 2027 on?
Definitely, this is the goal. But I have to say one more thing. Now the the tracks are not sold only through the dealers. There is as well direct channel from truck manufacturers. Yeah.
They have owned telesales centers. You know? Again, trucks could be sold over the phone. So they are more channels, but ultimately, the goal, of course, is to be in every truck. Yeah.
So and we are finding the way, what is the most optimal, how to get there with the least efforts and biggest and achieve biggest conversion rates. In terms of timeline, hard to comment. Of course, we do not wanna wait ages for that because everything cost money. They they are they are opportunity cost. But we need to admit that not only for Eurovac, this is the new channel, but as well for truck manufacturers, it's a new channel.
And we are experimenting together what is the most effective way in order to converge customer into active user or user of these of these services. So very much depends on agility and readiness and preparedness of our partners as well. So I do hope that we will, again, make significant steps in 2026 provided that platform being equipped as we were commenting in our results this year with energy, stall, with with other services quickly to follow, e wallets, on onboarding, I already mentioned, cost calculator, etcetera. So the readiness of the platform is in totally different level, let's say, than than it was six months ago or or a year ago. And therefore, we can now really focus on, especially, on the the accelerating the sales channels because simply, that is something something to offer already in a in a new platform.
So so logically, you might expect like a good or a strong progress in 02/1926.
Thank you.
There are no further questions. I will now hand back to Martin Vahanka for closing remarks.
So thank you for your time. Thank you for your questions. I do hope that you appreciate that we are very proud of these results. I think it's it's one of the set of results where if we look on vast majority of those, it's it provide us this this great satisfaction, beat net revenue growth, beat cash EBITDA, beat deleveraging, and this is all happening in the context of very strong progress with our road map where on which we are talking for years and introducing to the market as a as a concept, as an idea. Now it's coming through.
So I'm very happy that our product and tech teams are having high cadence and and therefore, we are stepping into the period that will be augmenting current growth and current capabilities with total new and market unprecedented capabilities. So we are very excited being in this period. And thank you simply for your for your trust and for you following us. And see you see you and hopefully to see you soon again with great results delivered by your work.
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